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How Much Deference Should the CAFC Give the USPTO?


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: July 11, 2012 @ 9:51 am

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Yesterday I wrote about the petition for en banc rehearing that I recently filed in Plasmart v. Kappos.  See Petition for Rehearing en banc filed in Plasmart v. Kappos. The case arose from what was originally an inter partes reexamination of U.S. Patent No. 6,722,674. The patent examiner ultimately concluded that claims 20-33 were patentable.  The Board agreed that claims 20-33 were patentable as not being obvious, but also determined that claim 1 was patentable as well.  Then at the Federal Circuit, in a nonprecedential decision, the panel determined that none of the claims were patentable.

I question whether it is appropriate to have a nonpredential opinion after the USPTO has gone through the time and expense of an inter partes reexamination.  Based on the decision I specifically raised as an issue whether the original panel provided proper deference to the Board’s finding of facts, or instead merely substituted their own view.  A view that I don’t believe was properly explained with the required specificity under KSR.

Substantial Evidence

A factual determination of the Board is to be upheld if there is substantial evidence to support it, In re Gartside, 203 F.3d 1305, 1315 (Fed. Cir. 2000), and a finding is supported by substantial evidence if reasonable minds might accept the evidence as supporting the factual finding.  Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).  This has been translated by the Federal Circuit to mean “is the determination unreasonable?” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir. 2006).

The factual findings of the Board relative to the scope and content of the prior art – namely the Song reference – were reasonable and supported by substantial evidence.  The Board found there were structurally unique aspects not found in the prior art.  Yet, the original panel did not explain why the Board’s findings were unreasonable or not supported by substantial evidence.  In fact, the original panel does not offer any explanation whatsoever, instead only giving conclusions without support or explanation.  This violates KSR, which explains that mere conclusions of the sort relied upon by the original panel are not enough to support an obviousness rejection.  KSR at 401 (“To facilitate review, this analysis should be made explicit.”)

Furthermore, the rejection of all the claims by the original panel is made for the first time. The patent examiner in reexamination found claims 20-33 to be patentable, as did the Board, and yet there is no explanation as to what exactly was unreasonable on the part of the Patent Office.  Thus, the original panel seems only to have given a new ground of rejection without the most basic explanation required.  This is evident by the fact that the original panel suggested that it would be obvious and predictable to merely incorporate Song into Handong.  Even the panel’s own opinion suggests this would still not result in the claimed invention.

The Panel’s Determinations in Plasmart v. Kappos

More specifically, the original panel determined that the Song reference did not anticipate claim 1 because it did not teach each and every limitation of the claimed invention. Specifically, the original panel explained at page 8 of its decision:

The Board found that Figure 1 of Song did not clearly disclose a safety wheel attached to an arm frontwardly extended from the driven part of the twisting member or how those wheels were attached to the tricycle.

Under § 102, for a claimed invention to be anticipated, each and every element of the claimed invention must be disclosed in a single prior art reference, and that reference must be enabling so as to place the allegedly disclosed matter in the possession of the public. Akzo N.V. v. U.S. International Trade Com., 808 F.2d 1471, 1479 (Fed. Cir. 1986).  The original panel agreed with the Board that the Song reference lacks at least one critical limitation, but yet still concluded that one of skill in the art would merely “attach the Song safety wheel…” From a practical matter it would be impossible to attach the Song safety wheel to Handong to achieve the claimed invention.  The original panel themselves found that the Song safety wheel was structurally different.

Furthermore, the safety wheel of the ‘674 patent is referred to as a “universal rolling” wheel, which is very different from the two wheel structure envisioned and claimed by Song.  The Song reference does mention “universal wheels,” but those wheels are of a wholly different type, structure and function as the wheels disclosed in the ‘674 patent, which unfortunately use the same terminology.

For example, the Board decision at page 11 explains: “Song discloses that the universal wheels 24 are at both sides of the lower part of the front of the tricycle body base plate…”  Thus, the Board understood the “universal wheels” of Song as different than the single “universal rolling” wheel of the ‘674 patent.  There is, unfortunately, no good illustration of the Song safety wheel that clearly shows the two wheel embodiment, which is further support that a mere combination of Song and Handong could not produce the claimed invention.

Notwithstanding, it is still useful to compare Figure 1 of Song (below left) with Figure 4 of the ‘674 patent (below right).  Notice the ‘674 patent “universal rolling” wheel is mounted to the center of the supporting arm.  No similar supporting arm or safety wheel is shown in Song.

In fact, the two wheel structure of Song is structurally and functionally different than the “universal rolling” wheel of the presently claimed invention.  Thus, the determination that claim 1 was not anticipated is appropriate.  Nevertheless, the original panel concluded:

[The claimed invention] is nothing more than a predictable use of prior art elements (universal wheels in contact with the ground in front of the twister member) to address a known problem (stability)…

The difficulty with this conclusion is that it is not supported by the original panel’s own statements.  No combination of Song and Handong would result in the claimed invention.  Furthermore, the conclusion is based on a factually incorrect understanding of the claimed invention and the prior art, thus underscoring exactly why the Federal Circuit, as a reviewing Court, is supposed to give broad deference to the Board on matters of fact.

Conclusion

It seems to me that the level of explanation provided with this new ground of rejection would be insufficient if provided by a patent examiner, and would be insufficient if found in a decision of the Board.  I see no way a reviewing court could dissect the original panel’s thinking because so many basic questions are left unexplained, including: (1) Why would it have been common sense? (2) What facts suggest the presence of few alternative designs? (3) How can this be “a predictable use of prior art elements” when not all of the elements are found in the prior art? (4) What was unreasonable about the USPTO determination?

Great deference is to be paid to the findings of fact of the Board to avoid merely supplanting a reasonable, rational and supported determination with one that is simply different without further explanation. Supplanting the factual findings of the agency should not be permitted with respect to an obviousness rejection made for the first time, especially when the patentee no longer has the ability to present evidence to demonstrate why the rejection is inappropriate.

This is particularly true where, as here, the USPTO has conducted an inter partes reexamination proceeding and full Board adjudication.  Both the patent examiner and the Board determined the patentability of these claims in an adversarial setting.  It seems inappropriate for the Federal Circuit to create a new ground of rejection at this late stage without at least giving the patentee a thorough and complete explanation, as required by KSR, or even an opportunity to respond to such new grounds of rejection.

Stay tuned for more!

PREVIEW: Up next, discussion of  Tokai Corp. v. Easton Enterprises, 632 F.3d 1358 (Fed. Cir. 2011) and Ritchie v. Vast Resources, Inc., 563 F.3d 1334 (Fed. Cir. 2009), which like Plasmart find a claimed invention obvious even when not all elements of the claimed invention are found within the prior art.

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Posted in: Federal Circuit, Gene Quinn, IP News, IPWatchdog.com Articles, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

7 comments
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  1. […] Up next is discussion of the deference and what constitutes substantial evidence.  See How Much Deference Should the CAFC give to the USPTO? […]

  2. It appears that the Federal Circuit is following the lead of the US Supreme Court by arriving at its own finding of facts without even providing a forum to the parties where they can present evidence and argue its meaning to a trier of fact. This is certainly not in accordance with traditional notions of due process and fair play, but heck, if the Supreme Court can do it, then why not also the lower courts of “appeal”? What’s gravy for the goose surely trickles down to become sauce for the gander.

    Heck. Let’s go back to the good old days of “trial by combat” (to the death).
    It’s quicker, cheaper and more final (especially for the loser).
    And it is arguably arbitrated by that final arbiter in the sky. Who is more qualified than “Him” to make final judgment?

  3. test

  4. Art-

    Your test worked, but the comment you submitted earlier was caught in our spam filter. Upon reviewing it I’m not going to approve it. It is a long, anti-intellectual property diatribe that has nothing to do with the article. Comments on IPWatchdog need to be related to the topic of the article.

    -Gene

  5. Once again *common sense* is invoked as a “reason” for their decision, as the Supreme court has done recently. In both cases it seems intellectually very lazy to me, and smacks of shirking their responsibilities. The fact that the inventors are helpless before the courts makes it all the more onerous. I certainly appreciate your efforts to call their laxity to their and others’ attention.

    Stan~

  6. Stan,

    I think part of the problem is that too many judges are overly impressed with their own self-appraised high IQs.

    It fools them into believing they are know-it-alls.

    The self-lauding “logic” probably goes like this:
    It’s “merely” a toy after all. How complicated can that be? Ha ha.
    Move the wheel here, move the wheel there; what does it matter? Ha ha.
    We’re geniuses not only in legal matters but also in mechanical engineering and particularly in chaotic stability theory for dynamic physical systems, especially if the thing is “merely” a kid’s toy. Common sense. Simple is as simple thinks and simple does. Toys are just like boxes of chocolate. You always know exactly what you will predictably get.

  7. SB-

    It seems to me as if they are getting a sort of God type of attitude, with little thought to what their decisions might result in out there in the real world. To see them second guess the real experts as present in the USPTO seems very naive and vain to me.

    Do you think they actually understand how many millions of dollars of lost profits their *common sense* decisions will result in? Talk about your ultimate Ivory Tower! I tend to think not, just as long as they assuage their egos by leaving their *mark* on US patent law. It is definitely going to leave a not so pleasing mark, unless their decision is overturned by future decisions.

    Thanks for your amicus brief Gene! I can hardly wait to be able to read it.
    Stan~